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On 6 September 2012, the Competition Commission of Singapore (the "CCS") issued a Proposed Infringement Decision ("PID") against thirteen motor vehicle traders alleging that the traders had engaged in bid-rigging to suppress bids at public auctions of motor vehicles. This reflects an increase in enforcement activity by the CCS, which has recently initiated a series of enforcement actions for violation of the prohibition of anti-competitive agreements under the Singapore Competition Act (the "Act"). Other Asian competition authorities have also stepped up their enforcement actions, with the Malaysian authority already commencing its first investigation after its competition law came into effect earlier this year and the South Korean authority issuing two bid-rigging decisions in August and September this year.

In relation to the latest Singapore PID, according to the CCS, the motor vehicle traders are involved in bid-rigging through an agreement to suppress bids at pubic auctions. Motor vehicles sold in public auctions are reportedly vehicles seized by the Government for delinquent road tax or crimes such as smuggling, drug trafficking, theft and robbery.

In previous bid-rigging infringement decisions (against electrical and building works companies and pest control operators) by the CCS, the authority has considered bid-rigging arrangements as restrictive of competition by their very nature (equivalent to having the "object" of restricting competition under the EU approach and constituting a "per se" violation of competition law under the US approach). The CCS has stated that bidding procedures are designed to promote competition in a structured manner through the independent formulation and submission of bids, and that this competitive process will be distorted if the bidders collude or have knowledge of other bidders' bids.

It is important to note that a PID is not the final step in the process. It is a written notice issued to potentially infringing parties setting out the basis on which the CCS arrived at the proposed decision (equivalent to a "Statement of Objections" under the EU approach). The addressees of the PID have the opportunity to submit their defence arguments to the CCS, and provide any other information, before the CCS reaches a final conclusion on whether there has been an infringement and if so decides on the appropriate level of penalties, if any. The CCS will then issue an Infringement Decision if it has concluded that there has been a violation of the Act. In this case, the motor vehicle traders have until 18 October 2012 to make representations in response to the PID.

This case reflects a trend of increased enforcement activity by the CCS under the Act, which was implemented in phases between 1 January 2005 and 1 July 2007. Starting from 2008, the CCS has gradually increased its level of cartel enforcement under Section 34 of the Act, which prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have as their object or effect the prevention, restriction or distortion of competition. For example, in 2011, it issued an Infringement Decision against modelling agencies for colluding to increase modelling rates. Similarly, in 2011, employment agencies were fined for having collectively raised the monthly salaries of foreign domestic workers.

Most recently, in 2012 the CCS imposed financial penalties of a total of S$286,766 (approximately USD 234,362) on two ferry operators for engaging in unlawful sharing of price information in violation of Section 34 of the Act (the "Ferry Case"). According to the CCS, the financial penalty was set at a relatively low level as this was the first Singaporean infringement based on the sharing of information between competitors. In reaching its decision, the CCS pointed out that the relevant ferry market was a duopoly and the two operators exchanged sensitive and confidential price information, including quotations to corporate clients and travel agents. The CCS discovered in its investigation emails from operators to clients containing price information which were blind copied to the competitor, and evidence of price verification between the operators prior to providing quotes to clients. The CCS noted specifically in its decision that the Ferry Case was the first case in which the CCS has found that the sharing of sensitive information infringes Section 34 of the Act (reflecting the recent approach in other jurisdictions, in particular in the EU) - in previous cases the exchange of information was viewed as supportive evidence of a price-fixing or bid-rigging arrangement rather than as an infringement in its own right. In its decision, the CCS also noted that unauthorised infringement by employees does not relieve the corporate's liability under the Act.

The CCS is not alone in intensifying its enforcement action in the region.

For example, Malaysia's Competition Act came into effect on 1 January 2012, and the local authority already commenced its first antitrust investigation in July 2012. The Malaysian Competition Commission announced that it is investigating the Cameron Highlands Floriculturist Association, a local trade association for flower producers, for alleged price fixing of flowers sold in Malaysia and that it will issue a proposed decision soon.

In August 2012, the Korea Fair Trade Commission (the "KFTC") imposed a fine of 1.468 billion won (approximately USD 1.308 million) on two domestic medium-sized construction companies for bid-rigging in relation to a tender for public building construction works. In July 2012, the KFTC also took strict corrective measures against two companies (with a common director) for bid-rigging in relation to a public coastline survey and database construction project.

The Indonesian Business Competition Supervisory Commission (the "KPPU") has also been active in this area. The KPPU is reported to have initiated an investigation into an alleged cartel by soybean importers in July 2012. The KPPU had previously investigated the industry in 2008, and opened this new investigation after prices of soybean rose sharply by 60%.

These cases illustrate the increasing competition law risks facing companies active in the region, and the Ferry Case in Singapore shows that it is not sufficient for a company to have a good antitrust compliance policy on paper: it is essential that the company takes appropriate steps to ensure the full understanding of, and adherence to, the competition law compliance policy by all employees, especially sales and other front-line staff. These enforcement actions also illustrate that Asian regulators have been increasingly active in flexing their muscles and demonstrating to the public and the business community their determination to enforce competition law.

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